The ratio that indicates whether a company could pay all its current liabilities if it were to become due immediately is known as the acid-test ratio.

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The statement is true. The acid-test ratio is also known as the quick ratio and it measures a company's ability to pay all its current liabilities in the short term. It is calculated by dividing a company's quick assets (cash, marketable securities, and accounts receivable) by its current liabilities.

The Ratio That Indicates Whether a Company Could Pay All